Also, S&P represents the Wall Street establishment. So this moves an argument that has been advanced by economists Joseph Stiglitz and Thomas Piketty, our own financier Nick Hanauer, as well as activists favoring a higher minimum wage, into the business mainstream. Attention should be paid. Nobody can dismiss this research as coming from a pinko front. (Although, remember two axioms: Upton Sinclair’s “It is difficult to get a man to understand something when his job depends on not understanding it” and the timeless “You can’t cure stupid”).

The new report lays out what should be obvious: As more income goes to the richest, who save more (and gamble in the markets and seek rents), there’s less demand and weak growth. This makes digging out of recessions even harder. The embattled middle class loads up on debt after even both adults in a household are working (and wages stagnate). It creates a feedback loop that works against upward mobility. John Maynard Keynes observed this decades ago.

Higher levels of income inequality increase political pressures, discouraging trade, investment, and hiring. Keynes first showed that income inequality can lead affluent households (Americans included) to increase savings and decrease consumption, while those with less means increase consumer borrowing to sustain consumption…until those options run out. When these imbalances can no longer be sustained, we see a boom/bust cycle such as the one that culminated in the Great Recession .

Aside from the extreme economic swings, such income imbalances tend to dampen social mobility and produce a less-educated workforce that can’t compete in a changing global economy. This diminishes future income prospects and potential long-term growth, becoming entrenched as political repercussions extend the problems.

The report doesn’t go deep enough into causes, such as industry consolidation, loss of a progressive tax system, financialization, ill-considered trade deals and rent-seeking, and thus it’s responses are inadequate. It is also rich that Standard & Poor’s, which enabled so much reckless behavior leading to crashes and recessions, is now sounding an alarm. But that’s also a sign of how serious inequality is for the nation’s future.

Amazon and Microsoft are getting big-time press from their turn as the most valuable companies by Wall Street's measure. But market capitalization comes and goes, and it doesn't measure a company's good jobs or attention to environmental or social issues.